Islamabad, 9 August 2024 (TDI): After worries about a slowing economy were allayed by a surprise decline in unemployment claims, US market experienced the greatest trading day since November 2022. It was a recovery from the recent downturn.
Ending the day 2.3% higher was the benchmark S&P 500 index. On the one hand, the NASDAQ surged 2.9%, while the Dow Jones Industrial Average gained 1.8%.
Asia’s stocks saw slight increases, making up for some of the previous week’s losses. The Kospi in South Korea and the Hang Seng Index in Hong Kong both experienced increases of above 1%. The Nikkei 225 and the Topix equities in Japan were largely unchanged.
This coincides with the week’s biggest worldwide market meltdown that was sparked by Japanese stocks experiencing their worst day since 1987.
Although it is not typically a significant market event, the most recent jobless claims data “supports the view that recent pessimism may have been overdone,” according to a research from UBS Global Wealth Management’s chief investment office.
First-time claims for unemployment benefits in the US decreased more than anticipated to 233,000 last week, according to official figures from the US Labor Department.
Also read: Global Stock Markets Slump Due To Fears Of US Recession
Although there seems to be a rebound in international markets, experts caution that trading conditions will probably stay erratic for some time.
Peter McGuire from trading platform XM.com stated, “Investors are benefiting from trade opportunities presented by market volatility in the near term.”
“We are all awaiting the [US Federal Reserve] policy decision in September, and the election season will undoubtedly be difficult.”
Unlike the Bank of England and other central banks, the Federal Reserve refrained from reducing interest rates last week, a move that usually increases growth.
However, the turmoil in the markets this week fueled more conjecture about the timing and magnitude of the Fed’s planned reduction in borrowing prices.
“The market’s growing valuation is supported by [the] Fed’s projected rate decrease of up to 50 basis points in September,” according to Tribeca Investment Partners portfolio manager Jun Bei Liu.
